Gold Spot Price Open: $1,276
Gold Spot Price Close: $1,286
Change in Gold Spot Price: +$10
Silver Spot Price Open: $17.42
Silver Spot Price Close: $17.40
Change in Silver Spot Price: -$0.02
Precious metals ended up gaining again on Monday thanks to declining stock indexes from around the world as well as increased safe-haven demand. When all was said and done, gold gained close to ten dollars while silver ended up losing roughly 2 cents. Platinum and palladium finished the day mixed, but neither metal moved too far from where it began the day.
Potential BRExit Forces Global Stocks Lower
European indexes spent almost all of Monday edging lower and finished near 2-month lows thanks to a weak performance from Asian markets and continued concerns over a potential European Union exit by the United Kingdom. Being little less than 2 weeks away from a referendum vote, polled experts hold that there is a strong likelihood that Britain will leave the European Union. Stocks from the financial sector were amongst the worst performers, while energy stocks did not do well either thanks to crude oil prices pulling back after a recent rally.
Gold and silver, on the other hand, did extremely well today as the potential for a BRExit and the likelihood that interest rates will remain at the same level in the US force investors to seek safe-haven more than anything else. In fact, over the course of the past two weeks both gold and silver have gained at seemingly every turn and are looking increasingly tempting to investors who want to defend from the general feeling of uncertainty abounding across the global marketplace.
As we head further into this week, the FOMC’s meeting will be called into focus more frequently as the Fed’s meeting kicks off tomorrow and wraps up on Wednesday. The meeting will culminate in a speech given by Janet Yellen, though no one is expecting anything to come as a result of this meeting. Interest rates are likely going to remain put, and I fully expect the Fed to express caution with regard to when exactly and by how much they are going to be raised by. Cal State economics professor Sung Won Sohn commented on why the Fed is not likely to raise rates, by saying, “While the global economy has stabilized in the sense that it is not dropping like a rock, global economic growth remains anemic at best. Given all the uncertainties on economic growth and continued low inflation, there is no need to rush to hike interest rates.”
With little economic data on the table, you can bet that there will be continued speculation and reaction to the Fed’s likely inaction this week. For gold and silver this can be perceived as good news because as things move forward as they have the last few weeks, spot values are likely to keep moving upward. Now, silver is solidly higher than $17/ounce while gold is quickly approaching and looking like it will cross over the $1,300/ounce threshold. Being that we are in the slow summer months, gold and silver’s recent performance may be enough to carry into the rest of June and then into July and beyond.
Wrap-Up
This week has gotten off to a slow start thanks to a general lack of markets-moving economic data. There is a big policy meeting in the United States this week and a major referendum vote in the UK just before month’s end, and these two events have consumed the attention of the global marketplace. Gold and silver are expected to continue pressing forward thanks to the overriding safe-haven attitude expressed by investors both here and around the world.
Tomorrow sees the FOMC meeting kick off, and you can bet that the interest rate speculation will continue even though most everyone has come to terms with the likelihood that rates will be kept at the same level.
